ibn sultan
No funding has been allocated in the Indian Budget for Iran’s Chabahar port, according to the Budget papers. This is a break from the past when India allocated funding for the port.
The development comes amid US pressure on Iran and sanctions worry. It is reported that India is winding down from the project amid mounting US sanction concerns.
India’s Union Budget for 2025-26 had allocated Rs 100 crore (£9.3m) for the development of Iran’s Chabahar Port, which was revised to Rs 400 cr.
The port, located on Iran’s southeastern coast in the Gulf of Oman, has been a key element of New Delhi’s regional connectivity strategy, forming part of the International North-South Transport Corridor. India signed a 10-year agreement with Iran in 2024 to operate the Shahid Beheshti terminal, committing investments including $120m for equipment and a $250m credit line for surrounding infrastructure. India has transferred its full committed amount of USD 120 million to the Iranian side, the last tranche being in August 2025. Currently, India has no financial commitment left for the project.
The Chabahar project has faced external pressures, including US sanctions on Iran. Washington reimposed restrictions in 2025 but granted India a conditional waiver allowing operations to continue until April 2026. India’s involvement in Chabahar dates back more than a decade, with the project seen as vital for diversifying trade routes and strengthening ties with Iran and landlocked neighbours.
